Google acknowledges that search spending is being negatively affected by the digital asset market slump, which led to this current crypto winter. The tech company announced this week that ad growth for the third quarter was at a record low of almost 10 years.
Google’s Last Quarter Ad Revenue Growth of 6% is Due to Fewer Crypto Ads
Google, an online advertising company, has partly attributed a slower revenue growth to a decrease in ad spend by financial institutions. This includes those who work with crypto assets. During parent company Alphabet’s earnings call on Tuesday, Google’s Chief Business Officer Philipp Schindler admitted to witnessing reduced search spending during the third-quarter and elaborated:
We saw an example of this in financial services: we witnessed a decline in insurance, mortgage and loan subcategories.
In a report quoting the executive, CNBC noted that the with an overall ad growth of 6%, the three-month period was Google’s weakest among all quarters since 2013, with only one exception, at the beginning of the Covid-19 pandemic.
Youtube’s ad revenue also shrank on annual basis, with Google CEO Sundar Pichai referring to the challenging macro climate’s impact on the ad business.
In 2022, major cryptocurrencies such as bitcoin (BCH), and ethereum(ETH) saw a 60% drop in value compared with their highs. Since then, the crypto industry has seen several bankruptcies by hedge funds and lenders like Celsius Network, Voyager Digital and Three Arrows Capital. There have also been downsizings in companies like Blockchain.com or Crypto.com.
Coinbase, the leading U.S. cryptocurrency trading platform, reduced its workforce by 18%. Its stock has fallen 70% since then. In the third quarter this year, Google announced its partnership with the cryptocurrency trading platform.
Earlier in October, Google unveiled it will rely on Coinbase to allow customers to pay for its cloud services with cryptocurrencies in 2023, an indication of the tech giant’s hopes that the crypto winter will be short. Coinbase is also expected to move data-related applications to Google’s cloud infrastructure.
Do you think Google’s ad revenue will become even more dependent on the state of the crypto industry in the future? Please comment below with your thoughts.
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